An American businesswoman has been formally arrested in China on suspicion of "endangering national security" just days before Chinese President Xi Jinping arrives in the US for his first official state visit.

Phan Phan-Gillis, 55, who also uses the name Sandy, disappeared in late March while traveling as part of a delegation made up of local officials from her home town of Houston, Texas.

Her husband, Jeff Gillis, told US media he later discovered she had been detained by China's Ministry of State Security and that she was suspected of espionage and stealing state secrets.

Judging from news reports and corporate websites, Ms Phan-Gillis has been an active promoter of Sino-US ties.

During her trip to China in March she identified herself as executive president of the America Asia Trade Promotion Association (AATPA) and president of the Houston Shenzhen Sister City Association.

Missing Since March

Gillis went missing on March 19. We are only hearing about it just now because her husband was afraid publicity might jeopardize her chances of being released.

Since then, he has awakened to reality: He is at the mercy of merciless, corrupt Chinese leaders.

As noted by the Financial Times, "In China the definition of state secrets is broad and vague and often encompasses things that would be considered public information in other countries. Authorities regularly detain foreign citizens they suspect of spying but ethnically Chinese foreign citizens are far more likely to be held and charged."

Reader Questions

When I write about China I frequently get comments along the lines "What do you know about China? Have you ever been there?"

In the not-so distant past, such questions were accompanied by comments like "China is booming. Have you seen all the building cranes? They are everywhere. Every city is expanding ..."

My reply was along the lines of "There were cranes all over Florida as well, right before US real estate collapsed."

Now reports of vacant cities, malls, and corruption are all over news about China. Capital flight is the order of the day. China has to prop up the yuan or it might sink.

One does not need to go to China to see the pollution or understand the untenable fraud inherent in its massive State Owned Enterprise (SOE) schemes.

National Security Risk

I am an outspoken critic of planned government, GDP lies, pollution, and in general everything associated with China's corrupt central planning model.

It is questionable whether I could last a day without being arrested.

In regards to Gillis, I have to ask: WTF was a delegation from Houston in China for in the first place? Most likely it was a taxpayer boondoggle.

Regardless, Gillis was no more danger to China's "national security" than I am. But that's the problem, isn't it?

I do not get to decide, nor does an unbiased jury get to decide what constitutes "national security". In China, some unelected Communist bureaucrat attempting to prop up his regime gets to decide what constitutes not only national security, but anything and everything else.

If the state decides to burn Gillis at the stake, then that's precisely what will happen.

How China is Ruled

The Chinese Communist Party has ruled the country since 1949, tolerating no opposition and often dealing brutally with dissent.

The country's most senior decision-making body is the standing committee of the politburo, heading a pyramid of power which tops every village and workplace.

Politburo members have never faced competitive election, making it to the top thanks to their patrons, abilities and survival instincts in a political culture where saying the wrong thing can lead to a life under house-arrest, or worse.

Two-Bit China

The idea that a centrally planned communist country will soon be the preeminent economic power and its currency the world's reserve currency is laughable.

No one in their right mind believes Chinese growth estimates. And much of the growth we do see is nothing but malinvestment. China does not have a large, open, or liquid bond market that a global reserve currency requires. Heck, China dare not even float the yuan.

As noted above, those in China better be careful about what they say. Anyone who bothers to bluntly speak the truth, like I just did, would not last a day in China.

China may be a big economic power, but at the heart of it all, China is nothing but a two-bit, scandalous, central planning dictatorship when it comes to property rights, human rights, freedom of speech, and freedom of press.

Those who gloat over China's miracle growth and think the yuan will soon supplantthe US dollar are mistaken on both counts.

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